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| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 SB1660 Introduced 2/20/2015, by Sen. Karen McConnaughay SYNOPSIS AS INTRODUCED: |
| 35 ILCS 5/211 | | 35 ILCS 10/5-15 | |
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Amends the Economic Development for a Growing Economy Tax Credit Act and the Illinois Income Tax. Authorizes taxpayers to sell, assign, or transfer credits awarded under the Economic Development for a Growing Economy Tax Credit Act. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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1 | | AN ACT concerning revenue.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Section 211 as follows:
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6 | | (35 ILCS 5/211)
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7 | | Sec. 211. Economic Development for a Growing Economy Tax |
8 | | Credit. For tax years beginning on or after January 1, 1999, a |
9 | | Taxpayer
who has entered into an Agreement under the Economic |
10 | | Development for a Growing
Economy Tax Credit Act is entitled to |
11 | | a credit against the taxes imposed
under subsections (a) and |
12 | | (b) of Section 201 of this Act in an amount to be
determined in |
13 | | the Agreement. If the Taxpayer is a partnership or Subchapter
S |
14 | | corporation, the credit shall be allowed to the partners or |
15 | | shareholders in
accordance with the determination of income and |
16 | | distributive share of income
under Sections 702 and 704 and |
17 | | subchapter S of the Internal Revenue Code.
The Department, in |
18 | | cooperation with the Department
of Commerce and Economic |
19 | | Opportunity, shall prescribe rules to enforce and
administer |
20 | | the provisions of this Section. This Section is
exempt from the |
21 | | provisions of Section 250 of this Act.
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22 | | The credit shall be subject to the conditions set forth in
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23 | | the Agreement and the following limitations:
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1 | | (1) The tax credit shall not exceed the Incremental |
2 | | Income Tax
(as defined in Section 5-5 of the Economic |
3 | | Development for a Growing Economy
Tax Credit Act) with |
4 | | respect to the project.
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5 | | (2) The amount of the credit allowed during the tax |
6 | | year plus the sum of
all amounts allowed in prior years |
7 | | shall not exceed 100% of the aggregate
amount expended by |
8 | | the Taxpayer during all prior tax years on approved costs
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9 | | defined by Agreement.
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10 | | (3) The amount of the credit shall be determined on an |
11 | | annual
basis. Except as applied in a carryover year |
12 | | pursuant to Section 211(4) of
this Act, the credit may not |
13 | | be applied against any State
income tax liability in more |
14 | | than 10 taxable
years; provided, however, that (i) an |
15 | | eligible business certified by the
Department of Commerce |
16 | | and Economic Opportunity under the Corporate Headquarters
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17 | | Relocation Act may not
apply the credit against any of its |
18 | | State income tax liability in more than 15
taxable years
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19 | | and (ii) credits allowed to that eligible business are |
20 | | subject to the
conditions
and requirements set forth in |
21 | | Sections 5-35 and 5-45 of the Economic
Development for a |
22 | | Growing Economy Tax Credit Act.
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23 | | (4) The credit may not exceed the amount of taxes |
24 | | imposed pursuant to
subsections (a) and (b) of Section 201 |
25 | | of this Act. Any credit
that is unused in the year the |
26 | | credit is computed may be carried forward and
applied to |
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1 | | the tax liability of the 5 taxable years following the |
2 | | excess credit
year. The credit shall be applied to the |
3 | | earliest year for which there is a
tax liability. If there |
4 | | are credits from more than one tax year that are
available |
5 | | to offset a liability, the earlier credit shall be applied |
6 | | first.
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7 | | (5) No credit shall be allowed with respect to any |
8 | | Agreement for any
taxable year ending after the |
9 | | Noncompliance Date. Upon receiving notification
by the |
10 | | Department of Commerce and Economic Opportunity of the |
11 | | noncompliance of a
Taxpayer with an Agreement, the |
12 | | Department shall notify the Taxpayer that no
credit is |
13 | | allowed with respect to that Agreement for any taxable year |
14 | | ending
after the Noncompliance Date, as stated in such |
15 | | notification. If any credit
has been allowed with respect |
16 | | to an Agreement for a taxable year ending after
the |
17 | | Noncompliance Date for that Agreement, any refund paid to |
18 | | the
Taxpayer for that taxable year shall, to the extent of |
19 | | that credit allowed, be
an erroneous refund within the |
20 | | meaning of Section 912 of this Act.
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21 | | (5.5) A sale, assignment, or transfer of the tax credit |
22 | | award may be made by the taxpayer in accordance with rules |
23 | | adopted by the Department of Commerce and Economic |
24 | | Opportunity.
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25 | | (6) For purposes of this Section, the terms |
26 | | "Agreement", "Incremental
Income Tax", and "Noncompliance |
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1 | | Date" have the same meaning as when used
in the Economic |
2 | | Development for a Growing Economy Tax Credit Act.
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3 | | (Source: P.A. 94-793, eff. 5-19-06.)
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4 | | Section 10. The Economic Development for a Growing Economy |
5 | | Tax Credit Act is amended by changing Section 5-15 as follows: |
6 | | (35 ILCS 10/5-15) |
7 | | Sec. 5-15. Tax Credit Awards. Subject to the conditions set |
8 | | forth in this
Act, a Taxpayer is
entitled to a Credit against |
9 | | or, as described in subsection (g) of this Section, a payment |
10 | | towards taxes imposed pursuant to subsections (a) and (b)
of |
11 | | Section 201 of the Illinois
Income Tax Act that may be imposed |
12 | | on the Taxpayer for a taxable year beginning
on or
after |
13 | | January 1, 1999,
if the Taxpayer is awarded a Credit by the |
14 | | Department under this Act for that
taxable year. |
15 | | (a) The Department shall make Credit awards under this Act |
16 | | to foster job
creation and retention in Illinois. |
17 | | (b) A person that proposes a project to create new jobs in |
18 | | Illinois must
enter into an Agreement with the
Department for |
19 | | the Credit under this Act. |
20 | | (c) The Credit shall be claimed for the taxable years |
21 | | specified in the
Agreement. |
22 | | (d) The Credit shall not exceed the Incremental Income Tax |
23 | | attributable to
the project that is the subject of the |
24 | | Agreement. |
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1 | | (e) Nothing herein shall prohibit a Tax Credit Award to an |
2 | | Applicant that uses a PEO if all other award criteria are |
3 | | satisfied.
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4 | | (f) In lieu of the Credit allowed under this Act against |
5 | | the taxes imposed pursuant to subsections (a) and (b) of |
6 | | Section 201 of the Illinois Income Tax Act for any taxable year |
7 | | ending on or after December 31, 2009, the Taxpayer may elect to |
8 | | claim the Credit against its obligation to pay over withholding |
9 | | under Section 704A of the Illinois Income Tax Act. |
10 | | (1) The election under this subsection (f) may be made |
11 | | only by a Taxpayer that (i) is primarily engaged in one of |
12 | | the following business activities: water purification and |
13 | | treatment, motor vehicle metal stamping, automobile |
14 | | manufacturing, automobile and light duty motor vehicle |
15 | | manufacturing, motor vehicle manufacturing, light truck |
16 | | and utility vehicle manufacturing, heavy duty truck |
17 | | manufacturing, motor vehicle body manufacturing, cable |
18 | | television infrastructure design or manufacturing, or |
19 | | wireless telecommunication or computing terminal device |
20 | | design or manufacturing for use on public networks and (ii) |
21 | | meets the following criteria: |
22 | | (A) the Taxpayer (i) had an Illinois net loss or an |
23 | | Illinois net loss deduction under Section 207 of the |
24 | | Illinois Income Tax Act for the taxable year in which |
25 | | the Credit is awarded, (ii) employed a minimum of 1,000 |
26 | | full-time employees in this State during the taxable |
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1 | | year in which the Credit is awarded, (iii) has an |
2 | | Agreement under this Act on December 14, 2009 (the |
3 | | effective date of Public Act 96-834), and (iv) is in |
4 | | compliance with all provisions of that Agreement; |
5 | | (B) the Taxpayer (i) had an Illinois net loss or an |
6 | | Illinois net loss deduction under Section 207 of the |
7 | | Illinois Income Tax Act for the taxable year in which |
8 | | the Credit is awarded, (ii) employed a minimum of 1,000 |
9 | | full-time employees in this State during the taxable |
10 | | year in which the Credit is awarded, and (iii) has |
11 | | applied for an Agreement within 365 days after December |
12 | | 14, 2009 (the effective date of Public Act 96-834); |
13 | | (C) the Taxpayer (i) had an Illinois net operating |
14 | | loss carryforward under Section 207 of the Illinois |
15 | | Income Tax Act in a taxable year ending during calendar |
16 | | year 2008, (ii) has applied for an Agreement within 150 |
17 | | days after the effective date of this amendatory Act of |
18 | | the 96th General Assembly, (iii) creates at least 400 |
19 | | new jobs in Illinois, (iv) retains at least 2,000 jobs |
20 | | in Illinois that would have been at risk of relocation |
21 | | out of Illinois over a 10-year period, and (v) makes a |
22 | | capital investment of at least $75,000,000; |
23 | | (D) the Taxpayer (i) had an Illinois net operating |
24 | | loss carryforward under Section 207 of the Illinois |
25 | | Income Tax Act in a taxable year ending during calendar |
26 | | year 2009, (ii) has applied for an Agreement within 150 |
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1 | | days after the effective date of this amendatory Act of |
2 | | the 96th General Assembly, (iii) creates at least 150 |
3 | | new jobs, (iv) retains at least 1,000 jobs in Illinois |
4 | | that would have been at risk of relocation out of |
5 | | Illinois over a 10-year period, and (v) makes a capital |
6 | | investment of at least $57,000,000; or |
7 | | (E) the Taxpayer (i) employed at least 2,500 |
8 | | full-time employees in the State during the year in |
9 | | which the Credit is awarded, (ii) commits to make at |
10 | | least $500,000,000 in combined capital improvements |
11 | | and project costs under the Agreement, (iii) applies |
12 | | for an Agreement between January 1, 2011 and June 30, |
13 | | 2011, (iv) executes an Agreement for the Credit during |
14 | | calendar year 2011, and (v) was incorporated no more |
15 | | than 5 years before the filing of an application for an |
16 | | Agreement. |
17 | | (1.5) The election under this subsection (f) may also |
18 | | be made by a Taxpayer for any Credit awarded pursuant to an |
19 | | agreement that was executed between January 1, 2011 and |
20 | | June 30, 2011, if the Taxpayer (i) is primarily engaged in |
21 | | the manufacture of inner tubes or tires, or both, from |
22 | | natural and synthetic rubber, (ii) employs a minimum of |
23 | | 2,400 full-time employees in Illinois at the time of |
24 | | application, (iii) creates at least 350 full-time jobs and |
25 | | retains at least 250 full-time jobs in Illinois that would |
26 | | have been at risk of being created or retained outside of |
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1 | | Illinois, and (iv) makes a capital investment of at least |
2 | | $200,000,000 at the project location. |
3 | | (1.6) The election under this subsection (f) may also |
4 | | be made by a Taxpayer for any Credit awarded pursuant to an |
5 | | agreement that was executed within 150 days after the |
6 | | effective date of this amendatory Act of the 97th General |
7 | | Assembly, if the Taxpayer (i) is primarily engaged in the |
8 | | operation of a discount department store, (ii) maintains |
9 | | its corporate headquarters in Illinois, (iii) employs a |
10 | | minimum of 4,250 full-time employees at its corporate |
11 | | headquarters in Illinois at the time of application, (iv) |
12 | | retains at least 4,250 full-time jobs in Illinois that |
13 | | would have been at risk of being relocated outside of |
14 | | Illinois, (v) had a minimum of $40,000,000,000 in total |
15 | | revenue in 2010, and (vi) makes a capital investment of at |
16 | | least $300,000,000 at the project location. |
17 | | (1.7) Notwithstanding any other provision of law, the |
18 | | election under this subsection (f) may also be made by a |
19 | | Taxpayer for any Credit awarded pursuant to an agreement |
20 | | that was executed or applied for on or after July 1, 2011 |
21 | | and on or before March 31, 2012, if the Taxpayer is |
22 | | primarily engaged in the manufacture of original and |
23 | | aftermarket filtration parts and products for automobiles, |
24 | | motor vehicles, light duty motor vehicles, light trucks and |
25 | | utility vehicles, and heavy duty trucks, (ii) employs a |
26 | | minimum of 1,000 full-time employees in Illinois at the |
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1 | | time of application, (iii) creates at least 250 full-time |
2 | | jobs in Illinois, (iv) relocates its corporate |
3 | | headquarters to Illinois from another state, and (v) makes |
4 | | a capital investment of at least $4,000,000 at the project |
5 | | location. |
6 | | (2) An election under this subsection shall allow the |
7 | | credit to be taken against payments otherwise due under |
8 | | Section 704A of the Illinois Income Tax Act during the |
9 | | first calendar year beginning after the end of the taxable |
10 | | year in which the credit is awarded under this Act. |
11 | | (3) The election shall be made in the form and manner |
12 | | required by the Illinois Department of Revenue and, once |
13 | | made, shall be irrevocable. |
14 | | (4) If a Taxpayer who meets the requirements of |
15 | | subparagraph (A) of paragraph (1) of this subsection (f) |
16 | | elects to claim the Credit against its withholdings as |
17 | | provided in this subsection (f), then, on and after the |
18 | | date of the election, the terms of the Agreement between |
19 | | the Taxpayer and the Department may not be further amended |
20 | | during the term of the Agreement. |
21 | | (g) A pass-through entity that has been awarded a credit |
22 | | under this Act, its shareholders, or its partners may treat |
23 | | some or all of the credit awarded pursuant to this Act as a tax |
24 | | payment for purposes of the Illinois Income Tax Act. The term |
25 | | "tax payment" means a payment as described in Article 6 or |
26 | | Article 8 of the Illinois Income Tax Act or a composite payment |
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1 | | made by a pass-through entity on behalf of any of its |
2 | | shareholders or partners to satisfy such shareholders' or |
3 | | partners' taxes imposed pursuant to subsections (a) and (b) of |
4 | | Section 201 of the Illinois Income Tax Act. In no event shall |
5 | | the amount of the award credited pursuant to this Act exceed |
6 | | the Illinois income tax liability of the pass-through entity or |
7 | | its shareholders or partners for the taxable year. |
8 | | (h) Effective July 1, 2015, any tax credits awarded under |
9 | | this Act and not previously claimed by a taxpayer against its |
10 | | income tax liability under Section 201 of the Illinois Income |
11 | | Tax Act may be sold, assigned, or transferred, in whole or in |
12 | | part, to another Illinois taxpayer subject to all of the |
13 | | following conditions: |
14 | | (1) A taxpayer awarded an income tax credit under this |
15 | | Act may make only a single sale, assignment, or transfer of |
16 | | the tax credit earned in a taxable year; however, the |
17 | | credit may be sold, assigned, or transferred to one or more |
18 | | transferees. |
19 | | (2) The tax credit earned by the transferor may be |
20 | | transferred before the due date, including extensions, of |
21 | | the Illinois income tax return of the transferor. The |
22 | | amount of the credit transferred to the transferee or |
23 | | transferees may not exceed the amount of the credit earned |
24 | | by the transferor in the transferor's taxable year. |
25 | | (3) Written notification of the transfer or sale of |
26 | | credits awarded under this Act shall be submitted to the |
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1 | | Department of Commerce and Economic Opportunity and the |
2 | | Department of Revenue within 30 days after the sale, |
3 | | assignment, or transfer. The Department of Revenue shall |
4 | | provide by rule the information required to be provided in |
5 | | such written notification. |
6 | | (4) The transfer or sale of tax credits under this |
7 | | subsection does not extend the time during which those tax |
8 | | credits can be used. The carry-forward period for a tax |
9 | | credit that is transferred or sold shall begin on the date |
10 | | on which the tax credit was originally earned. |
11 | | (5) A transferee shall have only those rights to claim |
12 | | and use the tax credit that were available to the taxpayer |
13 | | that earned the credit, except that credits sold or |
14 | | transferred may not be used against a transferee's |
15 | | withholding tax liability. |
16 | | (6) If the taxpayer earning the credit fails to comply |
17 | | with the terms and requirements of the Agreement, and, |
18 | | pursuant to the provisions of Section 5-65 of this Act, |
19 | | notice is provided to the Department of Revenue of the |
20 | | taxpayer's non-compliance, the Department shall hold the |
21 | | transferor liable for any tax, penalty, or interest due as |
22 | | a result of non-compliance with the Agreement. |
23 | | (Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09; |
24 | | 96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff. |
25 | | 3-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12 .)
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26 | | Section 99. Effective date. This Act takes effect upon |